Despite the fact that homebuyers prefer to start the home buying process online, 88% still use a real estate agent to negotiate the ins-and-outs of the deal. In a survey by the National Association of Realtors, 43% of Buyers agent start the process by doing their own research rather than contacting a realtor. Both approaches have their advantages and disadvantages, so if you’re unsure, here is the information you need.
Pros and Cons?
Red flags can be spotted by agents. You may not realize there is a problem until you’re eating the meal when you buy a home without a buyer’s agent. Early in the process, it is easier to identify and navigate issues when working with an experienced buyer’s agent.
You will be represented by a buyer’s agent. While both agents can set up house tours, a buyer’s agent represents the buyer’s interests throughout the negotiating and closing stages. Buyer agents assist buyers in negotiating the selling price, facilitating inspections, and negotiating contingencies.
Is there a con?
While some buyers may prefer to navigate the process without representation, it can be helpful to understand two main reasons why some buyers do so:
Honey, money! By skipping the agent, buyers and sellers can save money.
We should point out that the commission is often included in the house price, so you may have heard the seller pays the buyer’s agent commission (usually 2.25%-3.5%, or 5%-7% of the purchase price). As a result, sellers include commission costs when they price their homes, and the listing agent and buyer’s agent split the commission from the sale, so technically the buyer is paying both agents.
There isn’t a “perfect” agent. If you’ve had a string of setbacks and feel that you chose the wrong agent, it can feel hard to find a buyer’s agent who understands your wish list.
What Is Dual vs. Exclusive Representation?
Although agents can represent both buyers and sellers, more and more agents are now specializing in one or the other side of the transaction. Agents who exclusively represent buyers do not list properties. A homebuyer’s agent represents only the buyer and avoids conflicts of interest with the seller.
Buyer’s Agents: Where to Find Them
Consider asking your friends and family for recommendations if you decide to use a buyer’s agent. A real estate agent’s livelihood depends on their reputations and on referrals.
Look for leads on the internet in your area, meet several agents and find one who not only has good credentials but also connects with you on a personal level, if you’re new to the area or don’t have any referrals.
Be upfront about your expectations and timeline when prequalifying agents based on your needs. Ask the following questions:
Are you local to the area? Since when? Look for an agent who knows the area well. A good agent will be objective and can refer you to a third-party source for more information so you can make an informed decision. You might also want someone who knows the neighborhood, local schools or the city’s development plans.
In the past three years, how many people did you help buy a home (not your firm)? Are you currently helping any clients? Find an agent who has proven success but isn’t overburdened with other clients so they can’t keep you in the loop.
Depending on your agent, you might be asked to sign a Buyer’s Broker Agreement committing you to working with him or her for a set period (usually three to six months). Please read all paperwork carefully. Make sure you can end the agreement without penalty or notice if you become dissatisfied.